Raw Transcript: 20% Market Crash By Year-End Is Just ‘Tip Of The Iceberg’ | David Woo

The day I w I start I decided I have to go short NASDAQ was the day that that I thought like when I heard that I said that's it. This is this you know of of course what I didn't realize was that that was just the tip of the iceberg. The US strategy is to control every choke point of the technology. In the rest of the world if they want to use this technology they'll have to rent it from American companies and pay them a lot of money you know and that's the idea. That's how they're going to basically keep this technology out of China's hand. Consumer sentiment has dropped the lowest level in months. Does this signal a spiraling of the economy that could get out of control? We'll find out with the next guest, David Woo, CEO and founder of David Woo Unbound. Now, David has had a very long career working in macro research and um and on the uh sell side of Wall Street, he holds a PhD in economics from Columbia University. He started his career at the International Monetary Fund IMF where he worked on the Asian and Russian financial crisis. He later served as head of global foreign exchange strategy at Barclays and then the head of global rates FX and emerging markets research at the Bank of America, Mel Lynch. So, thank you for coming on the show, David. It's a pleasure to host you today. Welcome. It's a It's my pleasure. It seems like Trump is backing off on a lot of the uh threats that he made on countries. He's readying tariff cuts. Um he is readying substantial tariff cuts actually designed to address high food prices in a series of new trade deals. The framework is aimed with Argentina, Guatemala, El Salvador, and of course earlier in the month you saw that a deal was struck with Xi Jinping. Why is he doing this? I think, you know, I think it's pretty obvious why he's doing this, which is the fact that, you know what, the midterm election is now only less than a year away. And let me tell you this. I think there's not been a president in the last 50 years that has as overwhelming an incentive to help his party retain congressional majorities as Trump right now heading to this midterm. And that's because it's very simple. I mean, just think imagine if Trump would if the if Republicans were to lose either the Senate or the House, Trump is going to go from Trump the powerful to the Trump to be the lame duck. And in fact, the Democrats are going to unleash a major legal onslaught, okay, that will bog down bog him down for the rest of his administration, starting with an impeachment trial over his crypto dealings that have netted his family more than $5 billion. Now, the point here is that so Trump needs to win the midterm. And I think coming off what happened last week, which was a major victory against the Democrats over the shutdown, I think Trump actually thinks he can because the odds, by the way, just so that you know, the odds are not good because in 20 out of the last 22, okay, midterm elections, the president's party has lost seats in the House. So Trump will be doing almost the impossible. The other the only two exceptions which is Bill Clinton and George W. Bush in 1998 and 2002 their approval rating were in the mid60s. Trump's approval rating right now as of this week's at 42. So Trump will have a lot of work cut out for him. And of course you say well what is he going to do? Let's think about this. You know if you look at his approval rating where he scores the worst of anything is on inflation right now. his approval rating on his handling of inflation is at 35%. Now, so I think from that point of view, I want to assume that if we're nothing else, Trump is going to do everything he can to drive down inflation over the next year. I mean, the next 6 months so that inflation starts to moderate into the actual election day. And that means in my humble opinion, there will there's un there are unlikely to be further actions on the trade war front. I think Trump is probably going to, if in fact, anything reverse some of the tariffs. He's going to look to basically drive down gasoline prices and maybe this maybe for that reason he's not going to go invade Venezuela. But whatever he's going to do, I think it's safe to assume that next year at this time inflation will be quite a bit lower than where it is now. What do you think is his priority or main focus? Then is it actually inflation? Think about it. If he's so concerned about fighting inflation right now, I'm not sure if he is, but let's say he is, why would he keep pressuring the Fed to lower rates? I mean, he may be unpopular, but I don't think he's stupid. He would know that lowering rates would exacerbate the inflation problem. I think, you know, I think, again, I I think, you know, Trump obviously he's a political opportunist, and I think he's got excellent political instinct. And I think, you know, at the end of the day, at this point of his presidency, he's quite different than a year ago when he first started. At this point is about the midterm. I really believe it's about the midterm. And I think from that point of view, you got to look at the opinion post and say, well, what do I need to do to improve my approval rating? That's what it's going to come down to. Now, of course, the other part of it is going to be jobs. There's no doubt. And this is why I have absolutely no doubt that there will be more fiscal stimulus to come. In fact, I think, you know, in fact, I think it's a great idea to do I mean, well, I mean, politically is a great idea to basically roll out this $2,000 basically tariff rebate. Okay? you know, in fact, do it as soon as possible through the second reconcilation bill, which I think could be passed as early as the first quarter next year. Do that before the Supreme Court hands down the judgment over the constitutionality of his tariff. So to make it a fit, a complete. So I think from that point of view, I think you're going to see that Trump's second year is going to be very different than his first year because Trump cannot even begin to imagine losing majorities in Congress, which will make him make his life miserable. What does the Trump administration have to show for the midterms? In other words, what progress or advancements in the economy and or their foreign policy can they show the American people? I think you know again it's actually very interesting because in a part of it obviously it's about perception versus the reality. I mean inflation is growing at 3%. But you know if you look I mean and and yet you know as I said before Trump's handling approval rating for handling inflation is at 35%. So clearly there's this perception that inflation is a bigger problem than what it actually is because I mean by the way I don't believe that you know the BLS is making up the numbers because we have a lot of private sources on inflation like you know price stat for example which is consistent with the idea that inflation is running around you know 3%. So I think from that point of view like you know I think the Republicans have to tell a much better better story about what they've accomplished but I think they have to see tangible thing you know that is to say things like coffee prices banana which is they're talking about now rolling back big time in terms of the tariff things that touch the common guy gasoline price if they can drive it down by basically another 30 cents between now and the midterm I think that will that will be that will be you acknowledged openly and widely by the voters. So, I think they'll have to do something that is obvious that can touch people and everybody in the street can actually relate to, which is not that easy, but that's why the $2,000, you know, prepaid is a terrific idea because there is nothing that's going to be more obvious than everybody getting a check for $2,000 in the mail, as crazy as it may sound. and it's gonna blow a big hole in the budget next year and this is why I think you know the curve is going to steepen next year which is a different story and so on so forth but I think I think that Trump is going to go down this path I have almost no doubt about it before we continue with the video let's talk about a growing issue a very important issue online privacy your personal data isn't just sitting in your email or phone it's being scraped sold and passed around by data broker sites every single day and you may not even know it today's sponsor delete helps you fight back. They monitor hundreds of broker sites, scan for your exposed personal data, and remove it before it can be used against you. You also get regular privacy reports that show where your data was found and what's been taken down. In fact, in one recent check, they reviewed over 340 plus listings to see if any data broker had my personal information on my report. That's how much is out there. And they keep scanning every single week. Don't wait. Go to joindeleme.com/davidlin and use the code davidin for 20% off of all US plans or scan the QR code here on the screen right now. Take control of your privacy before somebody else does. Yeah, he is committed to the $2,000 dividend. Okay, I got a few questions about this. So, from a political standpoint, why is this necessary? He's not up for reelection. He's got his second term already up, you know, finished up finishing up this uh this term. So why why why why does he really care if if let's say the uh the midterms are favoring the Democrats or the Republicans? Why does he have to blow the budget to buy votes? Basically, it doesn't make sense. There are a few reasons for this. First of all, in America, you know, I think, you know, the term lame duck usually applies to the second half of the second term of a presidency. Okay? In other words, that you know, you know, once you get into the second half of your second term, your party knows that you're not going to be running for reelection. So, you're irrelevant. So, therefore, they stop paying attention to what you say. Okay. Now, obviously goes without saying once you lose, you know, essentially your majority, you essentially the legislative phase of your presidency is over. And as I said, on top of that, the Democrats are going to impeach him. They're going to come after him, his family, everything he's done up to now. I'm telling you, he's going to have he he I mean, he's made a lot of money in his presidency so far, $5 billion. So, he's got plenty of money to basically hire some expensive lawyers. But believe me, this is what is going to be in store for him. So, I think from that point of view, there are a lot of reasons why I think Trump probably does not he will do anything. he will throw the kitchen sink at this midterm election to basically avoid, you know, essentially losing the majority, you know, essentially in both houses. Consumer confidence is uh low, like I mentioned. Let me just pull up the uh survey of consumers from the um Michigan index, uh University of Michigan here. So, here here it is. And uh as you can see, it's been trending lower for quite some time now. Um basically, ever since CO never really recovered. Um, but it really the the trend really got worse throughout 2025. Um, why is it at a multi-year low right now? And, uh, second part of the question, do you think the $2,000 dividends, they want to call it dividends, not stimulus check, do you think the $2,000 dividends will help? I think the point here is this. I I think, you know, personally, I think what re I mean, the reason why consumer confidence has been collapsing, okay, and by the way, just put that in perspective. the the the the magnitude of the decline in consumer confidence since the start of the year is what you see typically at the start of a recession, not at the start of a new presidency, by the way. So, this is extremely unusual what we've seen in terms of the magnitude of this decline. Okay? Now, I personally think it has everything to do with the tariff. Okay? And I think that the tariff actually has been a big problem for the US economy. Now of course we all know it hasn't really shown up much I think in the inflation data again you know CPI is running at 3%. It's not 5% 3%. But I do think that the fact that inflation is low meaning that the pass through from tariff into inflation has been limited until now is because companies don't have pricing power. They haven't got pricing power because actually the consumer sentiment is actually very weak. companies know if they start raising prices they won't be able to sell anything. So I think from not and then the fact that you know consumption was reasonably healthy in the second quarter was mainly because of preemptive buying. I would argue you know in anticipation of higher prices ahead and this is why I do think that you know holiday shopping season the next four weeks I think it's going to be key but I think it's going to be very weak for the most part. Now, what is even worse is this. Because companies haven't been able to pass on the higher tariff onto consumers, guess what? They've seen pressure on the operating margin. And this has forced them to basically find ways to cut costs. And guess what? They've been laying off workers. You know, it's actually very interesting because literally the White House has a spreadsheet where they track every single companies in terms of whether they're raising prices or not. Trump said this actually. He said companies, American companies better eat the tariff or you're really going to be in trouble. So right now, so companies cannot raise prices. What are you going to do? They're now basically finding AI as an excuse to lay workers off and that is what's really going on. So what is really going on is that you know so we're having to seeing higher inflation. That's because you know we're seeing basically uh more layoffs. I mean as you probably know allowed layoffs this year year to date is about almost you know a million people which is again you know which is which is the highest since co so all in all I think this is the problem the problem with consumer confidence is the fact that people are wary about the labor market you know people are feeling very insecure about their jobs people know that if you lose your jobs now you're never going to find another job at least not with the same pay right now I know a lot of people in that situation right now and then they can see that prices are going up and then and I do believe many Americans are worried about the AI bubble. I I think it's very clear you know this thing this is why like my own survey shows that there is tremendous insecurity about the financial situation of Americans right now. I want to touch on the AI bubble in just a minute but going back to the labor market. What has contributed to this labor market? In other words, suppose Trump were not in office. Suppose well maybe maybe he were but let's just take the tariffs out of the equation. Suppose tariffs never happened. Will we still have a weak labor market? I think, you know, listen, I mean, I I think, you know, we will have a weakish, but I don't think quite as weak as what we're seeing right now, but there is no doubt. I think, you know, like, you know, again, you know, if you look at it's actually to me, the most interesting thing is like in manufacturing, right? You would think that Trump's tariff is designed to make American goods more competitive by lowering the relative prices of US produced goods. And therefore you would think that the import substitution import competing sectors should be really like benefiting. They should be actually on fire right now. Import competing sector of course is the manufacturing. And yet if you look at autos you look like furniture which are the two biggest manufacturing sector in the US with you know capacity right now. I mean both sectors continue to basically shed workers like there's no tomorrow. So I think what it's basically telling you is that you know globalization has also globalized supply chain. So even those that are supposed to win out benefit from tariffs are caught up in a very difficult situation. Let's look at GM. GM's operating margin a year ago was at 7.2%. Now this latest quarter was 2.2%. That's a drop of 5 percentage point thanks to sheriff. And so I can understand why they're laying off workers. You know that that that that's what it is. Let me show you this headline. This is quite interesting here. The US is supposedly losing thousands of manufacturing jobs, says analysis. This was reported by CBS early in October. Employers shed 12,000 manufacturing jobs in August, while payrolls in the sector have shrunk by 42,000 since April, according to new analysis from the Center of American Progress. Isn't it ironic that this is happening when the whole purpose of tariffs is advertised to bring jobs back to America to onshore manufacturing? Exactly. You know, by the way, out of these 12,000 manufacturing jobs that were lost in August, 10,000 of these jobs were were basically were were were lost in the auto industry and the furniture industry. And which is interesting because you know we're not talking about like you think about this right you say well there are some industries that US already like you know got out of 20 years ago. So like you know you know a change in relative prices tariff you know over 6 months not going to make a difference. But if you look at autos and furniture these are two industries that were going strong at a certain point until a few years ago and there's a lot of spare cap capacity in both sectors. You would think that these two sectors at least we should be seeing you know job I mean hiring going up and the fact that we're seeing the opposite in fact that they're leading actually the the firing that to me is fascinating. So which sectors are the strongest right now from an investment perspective? Listen, I mean I mean I mean we can sit here and talk about this but you know but you know obviously tech has done well I mean you know I mean whatever that means I mean to the extent that you know if you I mean you know the contribution from capex of you know in terms of spending on information equipment is currently whatever I mean it's like what 2 percentage point of GDP if it hadn't been for the capex you know basically as spending by tech the US economy would have gone into a recession already this year. So I think the the important thing is to say you know what for me in my humble opinion you know if it hadn't been for AI the US economy would have probably already gone into a recession because of the tariff and the reason why it didn't is because of AI and AI mainly because a combination of the capex spending which has contributed importantly to GDP growth but also because but even more important is of course the wealth effect associated with the whatever the the $14 trillion of wealth that was created since April alone that has definitely you know enrich put a lot of money in people's pocket and they go on and spend it at least you know the rich people so I think from that point of view to me it's interesting because Trump is was got very lucky I would say he got you know again sometime you know it's better you know it's better to be right it's better to be lucky than right by the way as we all know like I think tariff his tariff war would have pushed the US come into a recession But he got lucky because the AI bubble just went, you know, essentially exponential. And I think from that point of view, I think therefore the biggest question I think going to 2026 is when is the AI bubble going to burst? Is it going to be now? Because if AI if if NASDAQ goes down 20% or more, which is my forecast, I mean, you know, the US will go into a recession and Trump is just going to basically kiss his whatever, you know, the midterm good night and goodbye. 20% or more that this year by the end of the year or like next year. What do you No, I I I you know, I'd like to see that because I'm actually short NASDAQ myself. I've been short NASDAQ uh for the last couple months. It's been very painful. But, you know, like now I'm back to uh as of you know, as of yesterday, I'm back to even. But the point here is that I don't know. I can tell you it's for sure going to be basically this year. But I think, you know, certainly I think over the next three months, I think there's a very good chance that it Yeah, I think I I think NASDAQ would be hitting heading heading much lower. I want to get your reasoning, but just take a look at this chart. You said you've been short of NASDAQ the last couple of months. Something triggered must have triggered you to say this is getting way too expensive. At what point did that start to look that way, David? I'll tell you, you know, the day I w I started I decided I have to go short NASDAQ was the day that opening that Larry Ellison became the second richest man in the world because Oracle stock went up like 60%. on the back of an announcement by Open AI that this company that is on track to make 12 billion this year is going to spend $300 billion on you know whatever computing services from Oracle in the next few years. Yeah, that I thought like when I heard that I said that's it. this is this, you know, of of course what I didn't realize was that that was just the tip of the iceberg that Sen Altman in his quest to cash in on this AI thing because, you know, as you know, like, you know, his, you know, he's now finally got his for-profit company spun off from the, you know, nonprofit and they're basically lining up for a potential IPO that could make him very rich because they're talking about trillion dollar that I didn't realize that his game plan of pushing for an IPO with a valuation a trillion dollars or more when he's only making you know whatever when he's losing 12 20 billion is by announcing a partnership with everybody in the universe and promising to spend money that he hasn't got but the market bought into it whether it was Oracle and then with Nvidia and then Broadcom A&D you name it so I think you know but the Oracle case obviously was when I you know first realized what was going on. And by the way, if you look at the last two months, the rally the the NASDAQ rally of the last two months has not been about you know Microsoft or whatever for Amazon. It's been about open AI open AI's quest to become a hyperskller to become a competitor to his biggest customer which is partner which is Microsoft. I mean which is like you know if you think about that alone is not that you know it's quite bearish I think for the whole AI thing but Pete I think the market is starting to get the joke the fundamentals make sense of what you're talking about but here's the kicker we've got liquidity coming QT is ending in a matter of weeks now it's already mid November and um some say that is stealth QE although it's not really but certainly we'll have more liquidity not less the Fed is still cutting rates although it's dubious whether or not they'll be cutting as much as expected given that inflation is higher. But in either case, we're in a dovish mode right now. That's good for risk assets, right? Are you factoring that in? I factor that in. In fact, actually, and it's very very interesting. You know, two weeks ago, as you know, Jerome Pal during, you know, the um the press conference of the last FOMC meeting pushed back on expectation of a of a December cut. I can, you know, I wish I, you know, I wish I could sit sit here and tell you that why I saw that coming. I didn't, but in my view, it was very clear why he said what he did. Because I think the Fed is as worried about the AI valuation as I am. Except the Fed cannot come out and say, "Oh, wow. This is a bubble." Except I think that the Fed has decided they don't want to become an accomplice of this bubble and therefore the last thing they want to do is to blow more air into this bubble and I think from that point of view that is the reason why like I I think this is this is why in a way you know the stock market and the rates market you know the correlation has become quite positive. It's well stock market goes up then the Fed is less likely to cut and then r's going to go up and stock market goes down that that's a different story. But what I'm saying to you is that I think I think the Fed gets the joke. I I think they they must be very worried because you know like you know we've seen this movie before when the do I mean I you many people would have many people argue back then like you know Greenspan should have stopped the uh the docom bubble. I mean when it burst finally like you know like it was you know yeah it was it was terrible and you know the Bernanki should have stopped the basically uh the housing bubble when that bubble burst you know US economy went into a protractive recession. So I think from that point of view like you know again the Fed will never admit it but in my my hunch is that they actually are concerned and so from that point of view if NASDAQ keeps going up then I think you know you're probably not going to see the sort of interest rate cuts that you might be um we might get you know in normal circumstances. Now this is a very interesting perspective from the Wall Street Journal here who is paying for the AI revolution. Okay, so tech companies are facing an enormous investment need that will outstrip even their considerable existing resources. Morgan Stanley estimates that roughly $3 trillion that is expected in global data center capital expenditures through 2028, only about half of that could be funded by projected cash flows. So that leaves about $1.5 trillion of financing gap. So where are they getting that money from? According to this article, to meet such a tremendous need, the companies will need to turn to the biggest funding markets. When it comes to corporate borrowing, those include mainstream high-grade bond markets issuance in the investment grade corporate bond market uh presented about twothirds of the more than $2 trillion sold this year. And uh who is you know invested in the mainstream bond markets? Well, retirees and pension funds. A lot of those. So that's Yeah. I'll let you comment on what I just read. I I think, you know, I I I'm not that worried about like where that money is going to come from because I I think we're going to see this thing crash way before we get to that point because at the end of the day, right now, the issue I think the market is starting to understand is not how how much can capex be ramped up. Right now the issue is when are we going to start seeing returns because the problem right now the biggest problem right now is the inability of the entire tech industry to monetize on AI now and there's a very good reason for this you know you know I mean you know I'm sure like you know you would have talked about then I think was an important report a couple of months ago you know MIT came out with a report based on hundreds of surveys in which they show that only 5% of US companies have decided to put AI into production. Okay? In other words, only a 5% US company AI is making a positive P&L contribution. The other 95% when they interview the CTO, they say, well, you know, listen, I mean, you know, the technology is not ready for prime time. Now, it's interesting because I don't have to tell you, Chachi BD 5.0 came out 3 months ago. It's generally considered to be about 20% better than Chachi BD 4.0. 0 and yet it took them 3 years to launch 4 5.0. Now if the technology is not good enough and then it will take them 20 three years to improve the technology by 20%. They've got a problem. They really have a problem because at this point the depreciation rate this is not like fiber optic lines that were late in the late 90s that had a life expectancy of 30 years. You're talking about these chips that depreciate basically loses all its value in three years time. So unless Sam Alman is right that all of a sudden we we're looking at artificial general intelligence AGI is going to take over in three years time. I think this whole AI revenue story is going to come back to basically haunt the whole entire AI bubble sooner than you think. So now that we have the government shutdown over uh essentially we now have government data to analyze going forward. So back to normal on that front. What government data or pieces of data are you looking forward to the most uh that you think may trigger the selloff that you're warning about? I think you know listen I mean obviously I think the job data is going to be the key thing. I mean it it based on but but again we have a lot of you know like ADP now they release weekly data and so on so forth and that tracks basically BLS data fairly you know reliably and that suggests that you know things have actually picked up a bit okay so so from that point of view like you know like I don't I think the point here is ironically we're now at a point okay that bad news is good news I mean to an extent that if if the if the data really come in really then the Fed will be forced to cut rates and that that that that that could give you the kind of liquiditydriven rally that that that you're looking for. But I think you know but then you you'll need really bad data and and and by the way we now know like you know basically the October data doesn't look like it's going to be released because they don't have them. Okay. So basically you now have to wait until December to get the November data. Okay. And then once you get the November data, you don't even know to what extent that because you haven't got a context to really interpret it because if you haven't got the October data, you don't know to what extent the November data was basically because what happened during the shutdown which is now over. So from that point of view in in a way even though the data blackout has ended you know you know theoretically it it actually hasn't ended and it you know for economists in terms of being able to read the data in order to basically make policies based on data I would say we're still probably at least six weeks if not eight weeks away. Okay. What about Chinese tech firms? I think uh AI is maybe a mega trend that we can't ignore. Maybe American tech firms aren't there yet and maybe their valuations are bit too lofty but uh is China catching up? Yeah, I think this is a key question, right? Because I mean if you think about like you know the AI bubble as being the biggest macro story in town, right? And I said like I think the AI bubble faces two major risks. One of which is of course as I said you know the inability to monetize you know so if revenue does not really start to accelerate at 200 300% for open AI I think people are going to start to basically uh pull back that that that's obvious the other risk that I think the whole entire AI bubble is facing is of course China okay I mean let me tell you this you know you know both China and the US understand that the AI My battle is going to be decisive in terms of determining the outcome of this race for economic hedgeimony. The US and China have very very different strategies. In fact, actually our business strategies. The US strategy is to control every choke point of the technology from chip design to large language models to hyperscalers and Trump wants to revive Intel so they can control chip manufacturing as well. And the idea is that America would dominate technology completely and the rest of the world if they want to use this technology they'll have to rent it from American companies and pay them a lot of money you know and that's the idea that's how they're going to basically keep this technology out of China's hand. So that that's the US basically line of attack. So what is China's basically line of attack? China's whole entire strategy is designed around turning AI into one big commodity, zero price commodity. Okay, this is the reason why like all the Chinese large language models are open source. I mean then right now of the six best, you know, whatever large language models, three of them are Chinese, okay? And they all open source. On top of that, there are at least 20 Chinese chip companies that are working towards producing AI chips that will cost a fraction of Nvidia's chips. Okay? Because what China's decided if they want I mean obviously philosophically they're saying well AI should be accessible to everybody. So they want to basically make as cheap as possible and the Chinese are very good at making things cheap. So from as a result what they want to do is drive the price of AI to zero. of course that's they think with that they'll be able to essentially you know essentially uh stop the US strangle holding technology and bankrupt the US by the way I mean because if they did that because if you think about what so you have two different strategies going on the right now it's interesting because if you look at the high valuation of NASDAQ the market clearly is currently pricing a US victory yet I can tell you the Chinese are getting closer and closer and closer every single day. In fact, actually just this morning, BU just announced that they're going to be uh now and they're going to be basically releasing two AI, you know, essentially inference chips already next year. I mean, and as I said, there are 20 basically chip designer China. Listen, this is the story. The story what people need to understand this is the biggest story in town which is that you know a few years ago under the Biden administration the US created the whole entity list as a way to sanction you know Chinese companies to basically restrict their access to sensitive technologies. Now you know Eric Schmidt you know the former CEO of Google was the sort of the architect behind this entire program and Eric Schmidt used to basically brag about the fact that this program is designed to give the US a 2 to threeyear lead over China and he used to say the two to three year lead is like eternity because technology is constantly changing two to three year is like you know it's a huge advantage let me tell you this the most important thing that's happened in 2025 so far and then the most fundamental realization is dawning on Washington, okay, is that it's no longer two to three years. It's now more like 6 months. Why do you think that Microsoft and Amazon came out yesterday and said they don't want Nvidia to be selling chips into China? I'm telling you this is the problem. So from that point of view, I think that China is catching up rapidly. And by the way, we're not talking about like just basically large language model in terms of I mean I have to say I'm rather surprised myself. I did not predict this. I didn't think this was going to be possible. How they managed to do this? I have no idea. But Chinese companies in ter building semiconductors is complex business. There are a lot of machines involved. The Chinese are now making their own etching machines, their printing machine, their lithographic machine. It's just incredible what they're doing. So I think from that point of view, this is going to be another major risk I think facing the US AI bubble. And then you know and this is going to be and this is very very scary for the US because it's possible right now the US the Microsoft the hyperscalers are investing hundreds of billion dollars in a technology that's not ready for prime time and then if that will almost certainly guarantee a US defeat and this is not even going to be it's not even funny. I mean, I think in terms of like I mean, I'm an American. I want to see the US at least have a fighting chance, but this is this is going to be the potentially the biggest risk for the US dollar, for the US stock market, for the US economy, period. Right? But Americans still don't have access to Chinese stocks unless they invest in the Hangen or something, right? So, you know, it's it's not like it's a it's it's an alternative that's readily available for most people. Yeah. But you could I mean you could you can buy Chinese stocks now like you know most just like in the US most of these big companies like Alibaba by do all that I mean they have ADR. Yeah. But but the point here is this. I mean it ironically this is not even about investing these stocks because the honest truth is that Beijing does not care about profits. This is not about profit. Xiinping does not care you know about profitability. Okay. He just wants to win this basically this race, you know, of economic hedgemony. He also needs to win because if he doesn't the US is going to do everything to keep China back. So from that point of view, this is why like you know like in the past whenever like there's economic slowdown. China they'll be like pouring hundreds of billion dollars into like you know stimulating the economy through real estate. You're not seeing them doing that because all the money they've got right now is being spent on R&D on, you know, essentially pouring money into companies so to basically play this catch up because they realize if they don't basically manage to break this basically um the strangle hold that the US has over China's basically access to technology, you know, China's dead duck. So from that point of view, I think you know there's no doubt in my mind that China is in a desperate drive to play catchup and and so far I have to say the results have been very impressive. Final question then David, what do we as investors have to do to play catchup with the with this growth? In other words, where do we position ourselves? You're short the NASDAQ. So we understand your position. Then if we have to be long something, what do we do? You know, listen, I I'll tell you, you know, like I I like different things. You know, there are different ways to basically play this. I like India actually by the way you know I like India because you know like I think first of all let's remember India is the worst performing stock market in 2025 so far despite the fact India is actually the fastest growing economy it's ironic but it is absolutely true I mean there are a lot of reasons for this and so on so forth part of it you know but there is no doubt you know the way I look at this is that this technology race between the US and China is going to get more and more intense over the next year and two years. I mean to the extent it could get very ugly. Okay. And there is no doubt the biggest beneficiary of this entire basically this clash of civilization between the US and China is going to be India because there is no doubt I mean just think about that for a moment like you know you know iPhone 17 just came out. It's getting rave reviews. It's the first time that any iPhone is being made outside China. It's in India. You know, this should basically like shut up anybody who was skeptical that India was going to be able to actually produce at the same quality as China. This is going to invite a lot of money. And then you think about this India I mean like half of the Silicon Valley companies the employees are Indians. I think from that point of view this whole if there's one economy that I think is going to be able to avail itself of AI and so on so forth and then with the geopolitical reposition in the world I think India is actually looks to me you know to be a a winner in 2026. Okay, thank you very much, David. Where can we follow you? Um, you know, I mean, I've got a YouTube channel, David Wu Unbound. If you're interested in my um in my um in my investment strategy, come check us out at David Unbound.com. We'll put the links down below. I'm just curious before we go why uh you decided to leave Wall Street to start your own business. I'm always curious understand why people do the things that they do that that they've done. I think mine was been you know listen I mean I mean in 2020 which was my last year on Wall Street you know like you know like my team like you know I managed 50 analysts you know you know the biggest macro strategy team on Wall Street and in that year we won something like 17 number one ranked positions in the institutional investor survey which was more than all other banks combined and I said to myself at that point like you know I cannot do better than this and I decided to essentially retire So, I actually retired. Okay. And then uh and I guess I was I'm I'm old enough that I was part of the generation that could still retire in the early 50s from Wall Street. And then my wife is from Israel. And then we've been together for many years. And I've always promised her that I was going to move to Israel. So these days, you know, I'm um I'm running my own advisory business. I'm I'm a professor here in Israel as well. I tend my garden and I'm having a great time talking to people like you. Okay. Well, this sounds like a good life. Congratulations. Well, we'll put the links down below. Follow David there. We'll we'll speak to David again. Thank you. Speak next time. Thank you. Thanks for having me. Thank you for uh Thank you for watching. Don't forget to like and subscribe.